Viacom Q3 Profit Down, But Results Beat Estimates

(RTTNews) - Viacom Inc. (VIAB, VIA) reported a profit for the third-quarter that declined 27 percent from the last year, while quarterly revenue increased about 2 percent. The results were impacted by the underperformance of Teenage Mutant Ninja Turtles: Out of the Shadows.

Both adjusted earnings per share and revenue for the quarter beat analysts' expectations. The company's shares are gaining 1.14% percent in pre-market trades.

Philippe Dauman, Executive Chairman, President and Chief Executive Officer of Viacom, said, "Internationally, our media networks are driving strong double-digit revenue growth, with new channel launches, growing distribution partnerships and substantial ad sales gains. Viacom's third quarter results were impacted by the underperformance of Teenage Mutant Ninja Turtles: Out of the Shadows."

Quarterly net earnings attributable to the company decreased 27 percent to $432 million from the prior year's $591 million, with earnings per share declining to $1.09 from $1.47 in the previous year.

Adjusted net earnings attributable to the company for the quarter fell to $419 million or $1.05 per share from $591 million or $1.47 per share in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.01 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly operating income declined 29% to $769 million. Media Networks adjusted operating income decreased 22% to $872 million, reflecting revenue declines as well as an increase in programming and marketing expenses. Filmed Entertainment reported an adjusted operating loss of $26 million, reflecting the timing of expenses and theatrical performance in the quarter.

Quarterly revenues increased 2% to $3.11 billion from the prior year's $3.06 billion, as Filmed Entertainment gains more than offset a decrease in Media Networks revenues. Wall Street expected revenues of $3.01 billion for the quarter.

Media Networks revenues were $2.51 billion, a decline of 3%. Domestic advertising revenues decreased 4%, as pricing increases were more than offset by softer ratings at some of our networks compared to the previous year, and a continuing strategic reduction of unit loads. International advertising revenues increased 13%, driven principally by growth in Europe. Absent an adverse 6% impact of foreign exchange, international advertising revenues increased 19%. Domestic affiliate revenues decreased 10%, principally reflecting a difficult comparison with the timing of revenues from certain distribution agreements in the prior year. International affiliate revenues increased 9%, and absent an adverse 3% impact of foreign exchange, international affiliate revenues increased 12%.

Filmed Entertainment revenues grew 30% to $621 million, driven by gains in license fees and theatrical revenues. Worldwide theatrical revenues increased to $91 million in the quarter, reflecting the June release of Teenage Mutant Ninja Turtles: Out of the Shadows. License fees grew 39% to $297 million in the quarter, driven by the licensing of certain titles for subscription video-on-demand services and revenues from Paramount Television productions.